BAPCOR LIMITED — AGM Information 2021

Oct 18, 2021

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ASX/Media Announcement Bapcor Limited (ASX:BAP)

19 October 2021

2021 Annual General Meeting

(I) Chair’s Address

I am delighted to present to you my first annual general meeting of shareholders Chair’s report which is for the year ended 30 June 2021.

The 2021 financial year delivered record results across Bapcor despite ongoing challenges and uncertainty in a COVID-19 environment. The Bapcor team once again delivered record annual revenue and earnings proving their dedication, and adaptability with a strong response to the unprecedented circumstances. The result highlighted the resilience of the Bapcor business in difficult economic conditions. It is worth reiterating that Bapcor is predominately a non-discretionary business, supplying essential parts and supplies to keep vehicles operating safely.

A final fully franked dividend of 11.0 cents per share was declared and paid in September 2021. This brought the full year fully franked dividend to 20.0 cents per share, representing a 14.3% increase on the prior year.

The safety and well-being of our team members remains at the forefront of Bapcor’s priorities. We reviewed our workplace COVID safe plans, rolled out wellness programs focused on mental health, introduced paid pandemic leave and encouraged working from home where possible. Succession planning and development plans were also completed across the business over the course of the year.

At the 2020 Annual General Meeting, Shareholders delivered a first strike on Bapcor’s Remuneration Report. The Board acknowledged the sentiments of shareholders and in response Bapcor has amended many parts of its Remuneration practices, which are outlined in detail in the 2021 Remuneration Report.

Bapcor is committed to accelerating our work to deliver on our environmental, social and governance (ESG) strategy. To emphasize the importance of this area the scope of the Nomination and Remuneration Committee has been expanded to include ESG. The Group’s initiatives and targets are outlined in the annual report including the vision that Bapcor aspires to be net carbon neutral.

In line with the annual review of Bapcor’s strategy and reflecting the exceptional progress made in 2021, the 5-year strategic targets for Bapcor have been updated with physical store and own brand targets revised upwards. The revised 5-year strategic targets will ensure Bapcor maintains its strong growth trajectory.

I would also like to acknowledge Andrew Harrison’s outstanding contribution in shaping Bapcor to be the business it is today. Andrew retired from his position as Chairman after 7 years with the company, including 4 years as an Independent Non-Executive Director. We extend Andrew and his family our very best wishes for his retirement. In September 2020 Bapcor welcomed two new Independent Directors to the Board, Mark Powell and James Todd, as part of the Board renewal and succession planning. We continuously review the needs of Bapcor and will appoint additional directors as appropriate.

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The success of Bapcor is in our people. On behalf of the Board, I wish to express my gratitude to our leadership team and to all Bapcor team members for an exceptional year. We also thank our shareholders, franchisees, customers and suppliers for their ongoing support and contribution to the continued success of Bapcor.

Margaret Haseltine Chair

(II) CEO Presentation

Attached are the slides, which will be presented by Darryl Abotomey (Managing Director and CEO) at the 2021 Annual General Meeting.

- Ends

This announcement was authorised by the Board of Bapcor Limited.

For further information:

Darryl Abotomey Managing Director and CEO Bapcor Limited +61 419 838 059 +61 3 9914 5555

Noel Meehan CFO Bapcor Limited +61 3 9914 5555

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ANNUAL GENERAL MEETING 2021 MANAGING DIRECTOR & CEO PRESENTATION

WHAT’S AT THE HEART OF BAPCOR?

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WE ARE THE UNSEEN PARTS OF EVERY JOURNEY

WHO IS BAPCOR?

Bapcor Limited is Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions. From our origins as Burson Auto Parts in 1971, Bapcor has since grown into a vertically integrated business servicing trade, wholesale and retail customers. Bapcor’s reach now extends across c.1,100 locations and employs approximately 5,000 team members across Australia, New Zealand and Asia.

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COUNTRIES LOCATIONS PEOPLE
~ ~
8 1,100 5,000
ACROSS THE IN AUSTRALIA, TEAM
ASIA PACIFIC NEW ZEALAND MEMBERS
AND ASIA
Includes Tye Soon (Bapcor holds 25% * Includes c.60 Tye Soon locations
equity interest in Tye Soon)
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SOUTH KOREA Locations

20 Tye Soon Limited branches (Operating as Sejong Parts Plus Limited Liability Company)

WE ARE GROWING OUR FOOTPRINT

THAILAND Locations

6 Plus 1 Tye Soon Limited branch (Operating as Pal Everts Co., Ltd) Team members 70 FY21 Revenue $5m

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(Operating as Pal Everts Co., Ltd) HONG KONG
Team members 70 Locations
FY21 Revenue $5m SINGAPORE 1 Tye Soon Limited
Locations branch (Operating as
2 Tye Soon Limited TSC Enterprise (HK) Ltd)
branches
MALAYSIA
Locations
15 Tye Soon Limited branches
(Operating as Naga Jaya Group) INDONESIA
Wholesale distribution
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AUSTRALIA Locations c.815. Plus 20 Tye Soon Limited branches (Operating as Imparts Group) Distribution centres 26 Team members 4,400 FY21 Revenue $1,587m*

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NEW ZEALAND
Locations
c.220
Distribution centres 2
Team members 560
FY21 Revenue $170m
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FY21 BAPCOR REVENUE BREAKDOWN

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10% discretionary
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90% Non-discretionary
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Retail – Discretionary Retail – Non-discretionary Trade & Wholesale – Non-discretionary

• 90% of the Bapcor’s revenue is attributable to parts that must be purchased otherwise a vehicle will not be able to be driven safely

• c.80% of Bapcor’s revenue is generated by trade and wholesale activities

• A considerable portion of the retail revenue relates to non-discretionary parts or services (an additional c.10%)

• A maximum of c.10% of Bapcor’s revenue might be considered discretionary retail spend

• This significant amount of revenue linked to non-discretionary spend differentiates Bapcor from many other retailers and distributors which is evident in the resilience of Bapcor’s results irrespective of economic conditions

Note: Retail non-discretionary considered to be products required to be able to maintain and operate a vehicle safely (batteries, electrical, oils/additives, spare parts).

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DELIVERING SPECIALIST PRODUCTS AND ADVICE FOR RESPECTIVE CUSTOMER GROUPS

TRADE

• specific focus on supplying automotive trade workshops in Australia, New Zealand and Thailand

• SPECIALIST WHOLESALE > product focused, specialist businesses with market leading knowledge, product range and depth in automotive electrical, batteries, suspension, braking, engine management/electronics, diesel, cooling and 4WD as well as commercial vehicles

• RETAIL

• omni-channel experience

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CUSTOMER DISTRIBUTOR/
WORKSHOP END CONSUMER
GROUP RESELLER
BAPCOR
ENTITIES
SERVING
RESPECTIVE
CUSTOMER
GROUP
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WE DELIVER RESULTS

REVENUE EPS 18%

EBITDA

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26% FY14 TO FY21 CAGR

34% FY14 TO FY21 CAGR

FY14 TO FY21 CAGR

NPAT – DIVIDENDS SHARE PRICE PRO-FORMA 30 JUNE 31% 15% 22% FY14 TO FY21 CAGR FY14 TO FY21 CAGR FY14 TO FY21 CAGR

		FY14	FY15	FY16	FY17	FY18	FY19	FY20	FY21
	Revenue ($’m) EPS (cents)	342 11.9	375 13.6	686 17.9	1,014 24.4	1,237 31.0	1,297 33.4	1,463 30.2	1,762 38.3
	EBITDA ($’m)	36.0	41.5	77.0	117.4	150.0	164.6	217.1	279.5
	Pro-forma NPAT ($’m)	19.4	23.1	43.6	65.8	86.5	94.3	88.7	130.1
	Dividends (cents)	0	8.7	11.0	13.0	15.5	17.0	17.5	20.0
	Share price 30 June ($)	2.12	3.40	5.52	5.49	6.55	5.58	5.90	8.50

Note:

1. The above table presents the pro-forma results of the Group between FY14 and FY21.

2. FY14 to FY19 EBITDA excludes the impact of AASB16 Leases. At a NPAT level, the impact of AASB16 Leases is negligible.

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WE HAVE A PLAN AND ARE WELL POSITIONED TO GROW

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Drive expansion of network footprint – physical and online

• Grow existing store sales

• Develop our network footprint

• Grow absolute number of stores

• Roll out improved concepts to differentiate against our competitors

• Provide customers with online offering to supplement physical stores

• Geographic expansion in Asia

Supplement market leading brands with Bapcor own brand products

• Moving closer to the manufacturer where capability exists and consistent with Trade and Retail strategies

• Implement in-field marketing resources to promote brands

Realise benefits and efficiencies of the Bapcor Group

Invest in our team members

• ESG – develop and deliver deep commitments to become net carbon neutral

• Enhance organisational capability by investing in our team member’s development

• Invest in key systems, digital – Structured learning and solutions & data driven analytics development across the group

• Procurement – utilise Bapcor’s scale to deepen supply relationships and financial benefits

• Key functional capabilities – sales excellence, pricing, procurement, product capability, brand management

• Leverage group logistics capability – deliver operational excellence and optimise supply chain benefits

• Leadership development

• Cohesive brand architecture – effective marketing spend

• Online training and development

• Utilise store networks to reach customers – Be an employer of choice – increase addressable market

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WE HAVE STRATEGIC PRIORITIES AND TARGETS

GROWTH

Underpinned by our core strategic pillars are a clear set of targets to drive future growth and Positively impact shareholder value. our community

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With a record result in FY21, strong balance sheet and robust cash flows, Bapcor is well positioned to deliver on these targets to ensure the continued growth and sustained success of the Bapcor Group.

ESG

NET CARBON NEUTRAL

SUPPLY CHAIN INITIATIVES

OWN BRAND

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INVEST

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WE ARE INVESTING FOR THE FUTURE

• On road vehicles* are increasing in Australia and New Zealand by c.350,000 per year

• Average age of vehicles is getting older

• Number of parts required continue to increase

• The only aftermarket business to supply parts for all on road vehicles

• Parts for every make & model of on road vehicle

• Includes new technology vehicles of electric, hybrid and hydrogen (by 2030 estimated to represent c.6% of on road vehicles)

• Established a team to focus on electric vehicles

• Expanding store footprint in Australia and New Zealand to be closest to customer base – workshops, retail, resellers – Increase from c.1,100 to c.1,500 locations

• Create most efficient supply chain in the industry

• Melbourne semi-auto DC; Brisbane semi-auto DC; bespoke DC’s

• Increase profitability through own brand expansion – from c.30% to c.45%

• Developing state of art technology / digital transformation that supports bricks & mortar and makes doing business easier for customers

• eCommerce (B2B & B2C); CRM; POS; WMS; Online Vehicle Service Booking; Workshop Management Systems; & much more

• Expanding into new markets with significant future growth potential

• Thailand, Tye Soon investment – Singapore, Malaysia, South Korea etc.

• Excludes motorbikes

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WE ARE RESPONSIBLE AND COMMITTED

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Positively impact our community

Environmental sustainability

Ethical supply chain/procurement

Good governance – supporting and developing our people

• Engage stakeholders and support the communities in which we operate

• Every Bapcor location supports at least two local community groups

• Aspire to be net carbon neutral

• Efficiently use resources

• Optimise our fleet

• Environmental benefits from the Victorian DC – to be replicated in Queensland

• Streamlined waste and recycling initiatives

• Continued contribution to Australia reforestation projects

• Ethical sourcing

• Uphold our values and code of conduct

• Forge strong supplier relationships

• Enhance the health, safety, training and development of our team members

• Enhance transparency in our supply chain through use of supplier self-assessment and/or independent audits

• Foster a diverse, engaging and inclusive workplace

• Continued developments and improvements to our > Focus on four key areas of diversity – Modern Slavery Framework gender, age, disability & ethnicity

• Pay fair share of tax in all jurisdictions

ESG AND SUSTAINABILITY COMMITMENT WITH ASPIRATIONS TO BE NET CARBON NEUTRAL

FY22 TRADING UPDATE/OUTLOOK

Solid start to FY22 – overall Group revenue flat in Q1 FY22 v Q1 FY21

• Result demonstrates the resilience and non-discretionary nature of Bapcor’s businesses

• NSW, VIC, ACT and NZ impacted by prolonged lockdowns – at least 70% of the stores affected

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Number of days in lockdown/under restrictions
350
300
250
200
150
100
50
-
Q1 FY21 Q2 FY21 Q3 FY21 Q4 FY21 Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22
VIC NSW QLD Other AU states (max) NZ
Days
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FY22 TRADING UPDATE/OUTLOOK (CONTINUED)

Overall Group revenue in line with last year:

– Non-lockdown areas are overperforming to expectation

• Lockdown areas are impacted negatively to expectation

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|||||||||
|---|---|---|---|---|---|---|---|
|FY21 Revenue by Segment|
|% stores impacted|Segment Revenue|Q1 FY22|Q1 FY21|
|by lockdowns|Q1 FY22 vs Q1 FY21|LFL sales|LFL sales|
|Trade/Burson|70%|Up 2 %|(1%)|+8%|
|9%|Bapcor Specialists|
|NZ/BNT|100%|Down 10%|(15%)|+4%|
|Retail/Autobarn|50%|Down 12%|(16%)|+36%|20%|36%|Bapcor Trade|
|Retail/Online|Up 80%|
|Bapcor Retail|
|Specialist Wholesale|Up 7%|
|35%|
|Bapcor NZ|
|SWG/Auto Electrical|Performing strongly|
|SWG/Truckline (Heavy CVG)|Performing strongly|
|SWG/WANO (Light CVG)|Underperforming| Excludes head office / eliminations|

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FY22 TRADING UPDATE/OUTLOOK (CONTINUED)

• Higher cost base due to:

• Duplication / higher costs associated with the Victoria Distribution Centre

• Group office

• Team member support during lockdown

• Gross margins:

• Stable across Wholesale and New Zealand

• Down c.0.5% in Trade and Retail due to revenue being driven by promotional and online pricing especially in lockdown areas with Click & Collect

– Expect margins to revert when lockdowns cease

• Initiatives continue:

• Store rollouts / refurbishments on track for full year

• DCV consolidation: 3 largest DCs transitioned

• Brisbane DC project underway

• Digital transformation

• Own brand increasing

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FY22 TRADING UPDATE/OUTLOOK (CONTINUED)

• The fundamentals of the vehicle aftermarket continue to remain strong, notably:

• An additional c. 350,000 vehicles are added to the Australian & NZ vehicles on the road every year

• Average age of vehicles continues to rise = more maintenance required

• Trends evident during Covid-19 are likely to continue:

  • Increase in secondhand vehicle sales with more cars on the road

  • Move away from public transport due to social distancing

  • More people spending their holidays domestically utilising their vehicles

• In FY22, Bapcor aims to deliver pro forma earnings at least at the level of FY21:

• This remains Bapcor's objective as we do not expect any further significant lockdowns in the second half

• The first half of FY22 is expected to be softer than the first half of FY21

• The second half of FY22 is expected to be stronger than the second half of FY21

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parts for repairs, maintenance and servicing in the automotive aftermarket

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DISCLAIMER

The material in this presentation has been prepared by Bapcor Limited (“Bapcor”) ABN 80 153 199 912 and is general background information about Bapcor’s activities current at the date of this presentation. The information is given in summary form and does not purport to be complete. Information in this presentation, including forecast financial information should not be considered as advice or a recommendation to investors or potential investors and does not take into account investment objectives, financial situation or needs of any particular investor. These should be considered, with or without professional advice when deciding if an investment is appropriate.

Persons needing advice should consult their stockbroker, solicitor, accountant or other independent financial advisor.

The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about and observe such restrictions.

This presentation does not constitute, or form part of, an offer to sell or the solicitation of an offer to subscribe for or buy any securities, nor the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issue or transfer of the securities referred to in this presentation in any jurisdiction in contravention of applicable law.

Certain statements made in this presentation are forward-looking statements. These forward-looking statements are not historical facts but rather are based on Bapcor’s current expectations, estimates and projections about the industry in which Bapcor operates, and beliefs and assumptions. Words such as "anticipates”, "expects”, "intends,", "plans”, "believes”, "seeks”, "estimates”, and similar expressions are intended to identify forward-looking statements. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors, some of which are beyond the control of Bapcor, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward- looking statements. Bapcor cautions investors and potential investors not to place undue reliance on these forward-looking statements, which reflect the view of Bapcor only as of the date of this presentation. The forward-looking statements made in this presentation relate only to events as of the date on which the statements are made. Bapcor will not undertake any obligation to release publicly any revisions or updates to these forward-looking statements to reflect events, circumstances or unanticipated events occurring after the date of this presentation except as required by law or by any appropriate regulatory authority.

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Asia Pacific’s leading provider of vehicle parts, accessories, equipment, service and solutions